Circle announces becoming a full-reserve bank, USDC to be regulated by the federal government
The stablecoin giant Circle announced on the 9th that it will become a "national digital currency bank," meaning that federal institutions including the Federal Reserve and the Treasury Department can directly regulate USDC.
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On September 9th, the USD stablecoin giant Circle announced that it would become a "National Digital Currency Bank," which means that federal institutions including the Federal Reserve and the Treasury Department can directly regulate USDC.
Jeremy Allaire, CEO of Circle, the issuer of USDC, announced this decision on the official website. He stated that the transition towards becoming a full-reserve banking business will strengthen the stablecoin USDC, which currently has a circulation of over $27.5 billion. He projected that the circulation value of USDC will grow to tens of billions of dollars in the coming years.
In the article, he pointed out that since its inception, Circle has aimed to build a global digital currency bank to achieve seamless, instant, and nearly free payments by combining fiat reserve currencies with open, permissionless blockchains and ultimately establishing new forms of capital formation and intermediation on these open networks. What started three years ago as a collaboration with Coinbase to launch USDC has evolved into critical infrastructure supporting new digital currencies and complies with stringent US money transmission supervision and regulatory standards.
“With USDC's circulation exceeding $27.5 billion and based on our long-term commitment to trust, transparency, and accountability in the US dollar reserve that supports USDC, we are in the process of becoming a federally chartered national commercial bank in the United States. Circle intends to become a fully-reserve national commercial bank operating under the oversight of the Federal Reserve, the US Treasury Department, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC).”
Currently, Circle operates under state money transmission regulations, which are not as strict as the federal regulations that national banks must adhere to.
Jeremy Allaire mentioned that Circle has exceeded the Basel III requirements for bank-level liquidity coverage ratio (LCR) and high-quality liquid assets (HQLA).
Stablecoins have long been an essential part of the crypto economy, serving as a bridge between cryptocurrencies and fiat currencies and playing an increasingly important role in the traditional banking system. Stablecoins enable large-scale remittances to be conducted in a cost-effective and efficient manner.
Just this year alone, stablecoins have grown tenfold, with the top three stablecoins including USDT, USDC, and BUSD collectively surpassing a market value of $100 billion in May, compared to only around $11 billion a year ago, prompting concerns from the US government, which has yet to establish clear regulations.
This article is authorized to be reprinted from Horizon News Network.